(5/21) Property tax revenue for Walkersville will increase 8.2% in their property taxes this year, due to the effect of inflation, as a result of the Town Council’s decision to maintain the Town’s current property tax rate of .14 per $100 of assessed value at their May 10th meeting.
According to the State, the estimated assessable tax base for 2023 for Walkersville increased from $758,807.019 to $820,721,900, or a difference of $61,914,811. At the current tax rate, this would result in an increase of $86,000 in tax revenue for the Town.
If the Town had opted to not accept the additional revenue, the Town Council would have needed to reduce the tax rate to .1294 per $100 of assessed value—which is referred to as the ‘constant yield rate.’
Prior to the decision to retain the current tax rate, Commissioner Michael McNiesh proposed instead reducing the tax rate to .10 per $100 of assessed value.
In defending his proposal, McNiesh pointed out "when the Town lowered its tax rate in 2020 from .16 to .14, the Town was sitting on a ten-million-dollar surplus." The 2020 decision came about as a result of criticism at the time that the Town had been realizing significant annual surpluses, resulting in a significant capital reserve.
"We now have an 11-million-dollar surplus," McNiesh said. "So in three years since we lowered the tax rate, the last time we’ve put another million dollars in the bank."
McNiesh noted that in the three years, although the Town has spent significant money on various studies, as well as purchasing new playground equipment, the surplus has gone up. "Since we are not spending the money in the surplus, we should be lowering our taxes and giving it back to the residents instead of taking it from them."
Commissioner Gary Baker questioned how the numbers would look had the Town, if instead of paying for many of the Town’s projects conducted over the past three years using COVID-19 ARAP funds, had been paid out of the Town’s surplus.
Town Manager Sean Williams said that in that case, the Town would have spent $2.1 million of their own funds and the surplus would have dropped by one million dollars.
Commissioner Mary Ann Brodie-Ennis defended keeping the current tax rate by stating that there are a lot of roads and sidewalks that are going to need to be repaired. "It doesn’t take a lot of scope to spend a million dollars on a project." Baker echoed Brodie-Emmis’ concerns, noting how many roads were out of compliance and need to be fixed.
McNiesh countered their concerns by stating, "by reducing the tax rate to .10 , we will reduce the yearly Town income by $300,000, which is the yearly budget surplus." McNiesh proposed the Town go ‘revenue neutral’, i.e., taxing residents only what it actually needs to cover expenses, then start spending money out of the Town’s $11 million surplus for any infrastructure projects.
In response to Brodie-Ennis’ concerns that projects could quickly eat into the Town’s surplus, McNiesh said that the Town’s surplus "is double the surplus that the Federal government recommends," implying that the Town had plenty of cushion in the surplus.
Brodie-Ennis countered by saying that because of the fiscal prudence of past councils, Walkersville does not have to worry about its finances and meeting expenditures. McNiesh responded, "there is a fine line between fiscal responsibility and hoarding taxpayer’s money."
McNiesh’s proposal to reduce the tax rate failed to receive backing from any of the other commissioners. As the Council opted not to reduce the tax rate to the ‘constant yield rate,’ the current tax rate remains.
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